RAK Airways to re-launch this year

Chairman says September-October period will see carrier take to the skies covering two routes - India and Saudi

By

Karen Hart

PublishedSaturday, August 21, 2010

A file picture of a RAK Airways plane in the company's earlier existence. (SUPPLIED)

RAK Airways will re-launch its operations in the September-October period with an aim to break-even on the first year, its chairman said.

The UAE's fifth carrier will start with two planes and will cover South India and Saudi Arabian routes, Sheikh Omar bin Saqr Al Qasimi said. UAE has Emirates, Etihad, Air Arabia and Flydubai.

“We will start with two aircraft then we will judge our situation. We don’t want to go very positive until we analyse our situation,” he said.

“We used to have three aircraft – two were for charters but they have been sold. We still lease one aircraft and that is being chartered for other companies. We will never use it for ourselves,” he added.

Despite the relatively slow growth of the economy, Sheikh Omar is positive that the re-entry would be successful.

“We are aiming (to break-even) as soon as possible. We are aiming from the first year,” he said. “It may be slow but we looked at what we’ve done in the past. We changed the aircraft type – we gone for smaller and more economical 737s. We also looked at the figures and the cost of the airplanes and staff and it looks positive.”

“What we are looking to serve is the Ras Al Kaimah population where a lot come from Southern India such as Calicut and people travelling to Saudi for Haj. If we could serve them with the right price with the right service, I think people will come,” Sheikh Omar added.

The Ras Al Khaimah carrier was created by the emirate's government in 2005 and started operations at the end of 2007. The airline carried about 125,000 passengers in 2008 before suspending services in May 2009 due to difficulties with its aircraft.

It reduced its fleet size from three aircraft to one, and terminated its services to Dhaka, Colombo, Calicut and Chittagong. At the same time the airline also cut jobs.

The airline ran on a charter-only basis using its only aircraft, a Boeing 757-200.

The cost of operating an airline with just one aircraft, besides logistics, was the key factor that forced the airline to terminate operations last year.

RAK Airways has been in negotiations with Boeing thereafter to lease and purchase up to four Boeing single-aisle 737 aircraft. The Dh1.65 billion ($449 million) order with Boeing for the purchase of this four Next Generation aircraft were announced in February 2008. Two of them have been finalised and will be used this year.

Contrary to what have been reported earlier, RAK Airways would not be a low-cost airline. “We are not a low cost airline,” Sheikh Omar said. “We will compete on a commercial basis as a full-fledged airline with a service equal to the price they pay. We are not low cost but we will also not compete on the high end of the market. Mid-ranged – this is what we are aiming.”

Recently appointed Omar Jahameh and his team are currently finalising the details of the flights.

RAK Airways - a private joint stock company incorporated in the RAK Investment Authority Free Zone with an authorized capital of Dh1.5 billion - has already invested more than $27.23m in infrastructure development, according to Oxford Business Group.

To complement the airway’s revival, substantial construction work is also running ahead for the RAK International Airport, which is angling to corner more of the passenger and cargo business within the UAE.